Consolidation is coming to media. ~Thrillist CEO Ben Lerer on the $100 million Discovery investment in Group Nine
Adam Rifkin stashed this in Microentertainment
On Thursday, Discovery Communications poured $100 million into a new holding company called Group Nine Media, which ties together four media brands: Thrillist, NowThis, The Dodo, and Seeker (Discovery's digital network).
The impetus for Group Nine, according to Thrillist CEO Ben Lerer, who will run it, is a macro trend in digital media toward consolidation.
“Consolidation is coming to media,” he tells Business Insider, referencing big investments by NBC in Vox and BuzzFeed, as well as the pickup of Gawker’s assets by Univision, and the sale of Business Insider to Axel Springer.
This is just the start, according to Lerer.
The new TV
Here’s Lerer’s theory: There are a few digital media brands that are set up to take advantage of a world dominated by distributed video, meaning video that lives everywhere you are. They know how to make video for YouTube or Facebook or Snapchat or whatever is next.
But these companies can't get onto TV, which is a critical market, unless they have help from a big partner who knows the ropes (like Discovery).
“Linear TV isn’t dead yet,” Lerer says. And TV is a lucrative business, especially while a huge chunk of the ad dollars are still there. That’s why you see companies like Vice, Vox, Ozy, and others pushing onto traditional TV.
Lerer thinks Group Nine needs to get there.
“All of [The Group Nine] brands should be creating longform [video] content,” Lerer says. And Discovery agrees.
One big goal of the new holding company is to figure out how to bridge the gap between the video these companies are creating for the internet and traditional TV.
Lerer doesn’t claim to have the answer yet, but he says since the announcement of Group Nine, he’s gotten six notes from TV execs asking about creating something together. He's being taken more seriously as a partner for TV. That's what $100 million from Discovery will do for you.
The ideal outcome for all the Group Nine companies is creating a 360-degree product that spans both the world of social media and the world of TV. That’s what Discovery is betting $100 million on. (The company is a minority investor, but has the option to buy a controlling stake.)
The Lerer family
A big part of the creation of Group Nine comes down to Lerer’s family. Ben’s father Ken, who cofounded NowThis, has been instrumental in many New York digital media companies including The Huffington Post, BuzzFeed, and even Business Insider, where he was an investor and board member until the sale to Axel Springer. His sister Izzie founded The Dodo.
The family element “made [the deal] possible,” Ben Lerer says. “There was 1,000% transparency … No posturing or staredowns.” There was trust, and a frank discussion of whether the move would be best for Thrillist, NowThis, and The Dodo.
Goodbye to raising money all the time
Lerer sounds relieved at the prospect of freeing himself, at least partially, from raising money.
“You get to pick your head up from the grind of constant fundraising,” he says. “Of worrying where the next [metaphorical] meal is coming from.” He calls that process “exhausting,” “frustrating,” and “stressful.” Lerer last raised in late 2015, when he took in $54 million and split Thrillist and its e-commerce wing, JackThreads, into separate companies.